The venture, starting in fall 2009, will show movies and television series from Paramount, Paramount Vantage, MGM, United Artists and Lionsgate.
It could provide competition in both programming and viewers to Time Warner's HBO and CBS Corp.'s Showtime.
Viewers will have pay-per-view access to big-budget releases from the studios, such as "Cloverfield," "Iron Man" and "Star Trek." Movies from the companies' archive libraries and new TV series created by the studios also will be featured.
The combined companies have a collection of thousands of films and hundreds of TV shows. MGM owns the world's largest modern film library, comprising titles from United Artists, Orion Pictures and other studios. Paramount has 3,500 motion pictures in its library, including recent blockbusters such as "Transformers" and "Beowulf" and Oscar winners "There Will Be Blood" and "No Country for Old Men."
Viacom owns the content of more than 100 television channels, including MTV, VH1, CMT, Nickelodeon and Comedy Central.
Viacom will provide marketing and other operational support through its MTV Networks division.